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Will the $84 million face-lift of Rochester's civic center pay off?

Rochester City Council members are slated to get a briefing on the Mayo Civic Center's budget Monday afternoon. The question is whether the outlook has started improving.

With a major face-lift completed last year, the Mayo Civic Center in Rochester is expected to draw more and bigger events. But so far, bookings are falling short of the need.

Last fall, Civic Center sales director Matt Esau explained why the facility's $84 million expansion and renovation was a mixed bag. He told the commission overseeing the downtown convention hall there was both good and bad.

The good? The potential to draw bigger events and more visitors.

The bad? Tougher competition.

"When you talk about Rochester as a destination, what we've seen with the expansion being built is that we're in competition with Dallas, we're in competition with Chicago, we're in competition with Atlanta," Esau said. "It's a new space for us to be in competition with than what we were before."

At that fall meeting, civic center officials said bookings were not where they need to be and costs were on the rise.

Taxpayers have a lot at stake in the outcome. The state provided a $35 million grant for the renovations. The idea was a major upgrade to the facility would bring in bigger and more lucrative events as Rochester seeks to position itself as a health care desination.

But they're signaling little has changed. This year still looks strong, but in the following years, confirmed sales are lagging.

Meanwhile, it's still unclear how expensive it will be to operate the facility, which adds uncertainty about the center's financial health.

There's another concern — a yearly city subsidy has ensured the Civic Center was able to balance it books.

Back in the fall, Civic Center executive director Donna Drews said if demand continues to lag into 2021, the subsidy won't be enough — resulting in a budget deficit.

"The variable will be how much business can we book, how much business can we generate," she said.

But the Civic Center is not fully in control of its own destiny. Most of the bookings — primarily from conventions — come through a different entity: Experience Rochester MN, the convention and visitors bureau.

Representatives from the visitors bureau declined an interview request, but said in an email they've exceeded sales goals in previous years and are on track to do so this year.

City leaders close to the issue say Rochester's new city administrator may recommend hiring an outside consultant to assess the facility's finances and business model.

Matt McCollom, the new chair of Mayo Civic Center Commission, expressed concern the visitors bureau isn't being aggressive enough in finding new business.

He cited a recent report from the group showing it landed 71 percent of the convention center business pursued last year.

While that number may sound impressive, McCollom thinks it's actually too high.

"To have that high of a conversion rate tells me that there's a lot of repeat business coming back," he said.

McCollom said the Civic Center has to expand it's sales beyond the reliable repeat customers.

"We have such a large center — the biggest ballroom in the state — we have more square footage space to fill," McCollom said. "If we just bring back the same groups every year it's not going to help improve our revenue enough to justify having that much more more convention center space."